100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Summary Economics international trade R133,00   Add to cart

Summary

Summary Economics international trade

1 review
 18 views  0 purchase

International trade covered in economics 244 neatly and well summarised

Preview 1 out of 1  pages

  • April 27, 2023
  • 1
  • 2022/2023
  • Summary
All documents for this subject (19)

1  review

review-writer-avatar

By: islamcallister • 1 month ago

avatar-seller
Studynotes101
Part 2 - International Trade

Chapter 1 – Why Does International Trade Matter

Theory of international trade timeline

1500-1700 Mercantilism

Adam Smith’s absolute advantage

Absolute advantage and labour costs

Absolute advantage in everything

1800’s Ricardian theory of trade
-David Ricardo’s comparative advantage theory
-Assumptions :1. A two-country and two-commodity model is applied.
2. Labour is the only factor of production, homogeneous and mobile within a
country but immobile between countries.
3. Technology does not change (no innovation)
4. There is full employment in both countries before and after the trade
5. Perfect competition prevails in all markets
6. Constant returns to scale
7. Free Trade: no restrictions on imports or exports
8. No transport costs

-Comparative advantage : the advantage that one country has over another if they can
producte a product at a lower opportunity cost than another country
-Opportunity cost : value of one product in terms of another e.g. the quantity of food that
must be sacrificed to produce one more unit of clothing

1900’s Factor endownment theory
-Heckscher-Ohlin theory
-Assumptions :1. Two country and two commodity model applies
2. Two factors of production, capital(K) and labour (L) that are mobile across
sectors
3. Perfect competition prevails in all markets
4. Free Trade: no restrictions on imports or exports
5. Constant returns to scale
6. Countries have identical production technologies
7. Consumer tastes are the same across countries, and preferences for
commodities do not vary with a country’s level of income.

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying this summary from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller Studynotes101. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy this summary for R133,00. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

83614 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy summaries for 14 years now

Start selling
R133,00
  • (1)
  Buy now